Another company has added its name to the Web
TV sweepstakes -- a name that's already on many Web-surfing computers:
Intel. The microprocessor giant is promising lots of viewing pleasure
with its TV technologies, but it faces potential static when it comes to
lining up content and designing the right user experience.

Intel is getting inside Internet TV.

What's been grist for rumor mills for weeks was finally confirmed
Tuesday. Intel's TV offering -- which won't be branded with the Intel
name -- will be a combination hardware, software and content package
designed to "delight" consumers, said Erik Huggers, General Manager for
Intel Media, during the All Things D Dive Into Media Conference.

Planned for release later this year, Intel's TV package will include
hardware that will have a "beautiful" industrial design, said Hugger. It
will support live and on-demand TV, as well as apps.

It will also have a camera, which privacy-conscious consumers may
want to turn off. The camera could be used for video chats and observing
the habits of TV watchers in order to serve up their favorite content
when they appear in camera range, and for targeting ads at them.

All those factors could make the camera a controversial element of the package. "People are freaking out about the camera,"
NPD
industry analyst Ben Arnold told TechNewsWorld.

Intel did not respond to a request for comment for this story.

Faster Channel Switching

Software bundled with Intel's TV offering will make its hardware easy to
integrate with an entertainment system. Other issues annoying viewers
-- slow channel-changing and antiquated channel guides -- will be
addressed by the software.

Tablets and eventually smartphones will be supported by the software,
as well as the new HEVC (H.265) video codec, rather than the more
common H.264 codec.

Although there has been speculation that Intel had found a way to
blow up the log jam between technology companies and content holders
over bundling what consumers watch, that doesn't appear to be in the
cards for Intel TV.

Its TV offering won't be styled after "a la carte" programming.
Instead, Hugger said it will be offering "right" bundles -- bundles with
content better tailored to a watcher's needs and wants.

Content Nut Uncracked

It's not surprising that Intel couldn't get content providers to budge
on bundling, according to Jonathan Hurd, a director at strategy
consulting firm
Altman Vilandrie.

"There's very little incentive for content providers in the value
chain to unbundle, because the TV industry is flourishing with the
players that are there," Hurd told TechNewsWorld.

"Why should they upset existing players by offering a new entrant
like Intel or Apple or anyone else unbundled channels?" he asked.
"There's no incentive for them to do that."

Any hopes of price-sensitive consumers that Intel would make their TV
watching cheaper were dashed by the chipmaker at the conference. "This
won't be a value-priced service," IDC's Ireland observed. "Consumers
won't be subscribing to it because it's half the price of Comcast."

Unlike much content on the Internet, people have shown a willingness
to open their wallets for video, said Brett L. Sappington, director of
research for
Parks Associates. "Intel sees video as the kingmaker in content," Sappington told TechNewsWorld.

"Of all the different areas of content, video is the one people are really willing to pay for," he added.

What's UI Worth to Consumers?

Like Apple, Intel appears to believe that price will not be a barrier to
TV watchers buying its product if it can produce a cool device. "What
Intel is going after is an improved user experience," IDC's Ireland
explained. "Creating better user experiences around video is one of the
key value propositions of this."

User interfaces, though, aren't as high on TV watcher's priority
lists when considering a new product, countered Altman Vilandrie's Hurd.

"Even though human interface is important, the fact is that price,
brand and selection of content are much more important in a consumer's
decision of what they're going to use to watch video," he said.

Intel won't be the only player trying to bring innovation to TV in the coming years, predicted industry analyst Jeff Kagan. "This is the beginning of the race," he told TechNewsWorld. "The start gun has just fired."